Microsoft and Sony, bitter rivals in the console gaming market, have signed a memorandum of understanding detailing a partnership for artificial intelligence, custom semiconductor, and cloud gaming developments - the latter likely a direct response to Google's Stadia.

While Microsoft and Sony duke it out in the console gaming market with their respective Xbox and PlayStation devices, the companies have agreed to work together in the fields of artificial intelligence and gaming - the latter positioning Microsoft's Azure cloud platform as the driving force behind Sony's streaming services going forward. The partnership comes as Sony continues to push its PlayStation Now cloud gaming service and Microsoft prepares to launch its own xCloud streaming platform.

'Sony is a creative entertainment company with a solid foundation of technology. We collaborate closely with a multitude of content creators that capture the imagination of people around the world, and through our cutting-edge technology, we provide the tools to bring their dreams and vision to reality,' claims Sony president and chief executive Kenichiro Yoshida. 'PlayStation itself came about through the integration of creativity and technology. Our mission is to seamlessly evolve this platform as one that continues to deliver the best and most immersive entertainment experiences, together with a cloud environment that ensures the best possible experience, anytime, anywhere.

'For many years, Microsoft has been a key business partner for us, though of course the two companies have also been competing in some areas. I believe that our joint development of future cloud solutions will contribute greatly to the advancement of interactive content. Additionally, I hope that in the areas of semiconductors and AI, leveraging each company's cutting-edge technology in a mutually complementary way will lead to the creation of new value for society.'

'Sony has always been a leader in both entertainment and technology, and the collaboration we announced today builds on this history of innovation,' adds Satya Nadella, Microsoft chief executive, in a considerably shorter statement on the memorandum's signing. 'Our partnership brings the power of Azure and Azure AI to Sony to deliver new gaming and entertainment experiences for customers.'

As well as working together on cloud technologies for game and media streaming services, Microsoft and Sony have confirmed that they are to work on artificial intelligence projects to include custom semiconductor efforts beginning with the development of an image sensor platform which combines Sony's image technology with Microsoft's Azure AI platform.

While the companies have confirmed that the partnership will see Microsoft AI technology integrated into Sony consumer products, neither has offered a timescale for when these devices or features will reach end users.